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Publisher Correction: An alternative representation of the C-CAPM with higher-order risks
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Article
An alternative representation of the C-CAPM with higher-order risks
This paper exploits the concept of expectation dependence to propose an alternative representation of the consumption-based capital asset pricing model (C-CAPM). While the first-degree expectation dependence (...
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Article
The costs and benefits of reinsurance
Purchasing reinsurance reduces insurers’ insolvency risk by stabilising loss experience, increasing capacity, limiting liability on specific risks and/or protecting against catastrophes. Consequently, purchasi...
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Article
Economic Effects of Risk Classification Bans
Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, to compute the corresponding premiums, and thereby to reduce asymmetric inform...
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Article
Does insurance fraud in automobile theft insurance fluctuate with the business cycle?
Financial institutions face various cyclical risks, but very few studies have analyzed the cyclicality of operational risk. External fraud is an important operational risk faced by insurers. In this research, ...
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Chapter
The Empirical Measure of Information Problems with Emphasis on Insurance Fraud and Dynamic Data
We discuss the difficult question of measuring the effects of asymmetric information problems on resource allocation. Three problems are examined: moral hazard, adverse selection, and asymmetric learning. One ...
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Book
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Chapter
Adverse Selection in Insurance Contracting
In this chapter we present some of the more significant results in the literature on adverse selection in insurance markets. Sections 10.1 and10.2 introduce the subject and Sect. 10.3 discusses the monopoly mo...
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Article
Efficiency of insurance firms with endogenous risk management and financial intermediation activities
Risk management is now present in many economic sectors. However, none of existing studies consider risk management as a potential determinant of firm performance. In this paper, we investigate the role of ris...
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Article
Predicted risk perception and risk-taking behavior: The case of impaired driving
Research suggests an association between risk perception and risk-taking behavior in a variety of contexts. There is empirical evidence that perceived risk is generally biased and that perception of risk influ...
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Article
Lottery qualities
The aim of this paper is to propose a model of decision-making for lotteries. Lottery qualities are the key concepts of the theory. Qualities allow the derivation of optimal decision-making processes and are t...
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Article
Comparative Mixed Risk Aversion: Definition and Application to Self-Protection and Willingness to Pay
We analyze the optimal choices of agents with utility functions whose derivatives alternate in sign, an important class that includes most of the functions commonly used in economics and finance (Mixed Risk Av...
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Article
Replacement Cost Endorsement and Opportunistic Fraud in Automobile Insurance
Traditional insurance contracts do not offer protection against the replacement value of a vehicle. A replacement cost endorsement gives the opportunity to get a new vehicle in the case of a total theft or in ...
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Article
Diffidence Theorem, State-Dependent Preferences, and DARA
C. Gollier (The Economics of Risk and Time. Cambridge: MIT Press, 2001) has developed a standard technique based on the diffidence theorem. This theorem provides a very simple instrument to solve relatively so...
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Article
Lottery Decisions and Probability Weighting Function
This article analyzes the implications of basic lottery tests for the probability weighting function w(p). We first show that the w(p) function with one argument cannot accommodate three basic tests of lottery ch...
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Corporate insurance with optimal financial contracting
This paper attemps to rationalize the use of insurance covenants in financial contracts, and shows how external financing generates a demand for insurance by risk-neutral entrepreneurs. In our model, the entr...
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Article
Full pooling in multi-period contracting with adverse selection and noncommitment
This paper analyses multi-period regulation or procurement policies under asymmetric information between the regulator and regulated firms. As well known in the literature, some degree of separation is always...
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Book
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Chapter
Adverse Selection in Insurance Markets
In this survey we present some of the more significant results in the literature on adverse selection in insurance markets. Sections 7.1 and 7.2 introduce the subject and section 7.3 discusses the monopoly mod...
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Chapter
The Empirical Measure of Information Problems with Emphasis on Insurance Fraud
We discuss the difficult question of measuring the effects of asymmetric information problems on resource allocation. Two of them are retained: moral hazard and adverse selection. One theoretical conclusion, s...
